Brokerages stay positive on Godrej Consumer Products post Q3; here's why

Brokerages have taken a broadly positive stance and view Godrej Consumer Products as an execution-led growth story after the company reported its December quarter (Q3FY26) numbers on Friday, after market hours. 

GCPL Q3 results highlights:

In Q3, the fast-moving consumer goods (FMCG) company Godrej Consumer Products reported a marginal decline in its consolidated net profit at ₹497.91 crore as compared to ₹498.31 crore a year ago. 

 

Its revenue from operations stood at ₹4,099.12 crore, as compared to ₹3,768.43 crore a year ago. Check detailed results here 

 

At 10:08 AM, Godrej Consumer Products shares declined 2.4 per cent in trade on BSE, logging an intra-day low at ₹1,283 per share on BSE. At 9:25 AM, Cipla’s share price was trading 1.59 per cent lower at ₹1,293.9 per share. In comparison, the BSE Sensex was down 0.45 per cent at 81,169.87.

 

Brokerages’ view on Godrej Consumer Products

Nomura | Buy | Target raised to ₹1,525 from ₹1,520

The brokerage has maintained its top pick status for Godrej Consumer Products, citing a strong execution-led growth story. Nomura highlighted a recovery in the soaps segment and robust double-digit growth in home care, alongside "green shoots" of stabilisation in Indonesia and continued strength in Africa. 

 

Despite a slight 4 per cent cut to earnings per share (EPS) estimates due to higher taxes, Nomura remains bullish as Earnings before interest, tax ,depreciation, and amortisation (Ebitda) margins beat expectations at 21.5 per cent, driven by lower palm oil costs and structural supply chain savings. 

 

With management targeting aggressive 30 per cent growth in high-potential categories like air care and incense sticks, Nomura expects a healthy 16.5 per cent earnings per share (EPS) compound annual growth rate (CAGR) through FY28, viewing the company's innovation pipeline as a key driver for long-term compounding.

Elara Capital | Accumulate | Target raised to ₹1,310 from ₹1,240

Elara noted that Godrej Consumer Products’ India business delivered a strong Q3, led by volume growth and a recovery in margins, with consolidated Ebitda rising in the mid-teens. The brokerage expects market conditions to normalise and support a broader recovery from FY27, and models full-year FY26E Ebitda growth of 8 per cent, followed by low-teens Ebitda growth in FY27E on a favourable base. 

 

While GCPL’s growth portfolio—air care, hair care and liquid detergents—continues to perform well, Elara believes that a sustained recovery in soaps and high single-digit growth in household insecticides will be critical to drive double-digit volume growth in India. Elara raised its target price, valuing the stock at 48x Dec’27E EPS (earlier 45x), aided by improving Ebitda outlook on the back of lower input costs.

Emkay Global Financial Services | Buy | Target cut to ₹1,400

Emkay views GCPL as a strong execution-led growth story. The brokerage said Q3FY26 results were in line, led by a solid 11 per cent Y-o-Y growth in the India business, driven by 9 per cent volume growth, while Ebitda rose 22 per cent on the back of a 220 bps expansion in operating margins to 24.8 per cent. 

 

International revenue grew 8 per cent Y-o-Y, though Ebitda growth was muted at around 5 per cent, reflecting near-term challenges overseas. Looking ahead, Emkay expects high single-digit revenue growth and high-teen earnings growth over FY26–FY28, with further margin expansion in India supported by stronger core portfolio performance. Overall, the brokerage believes GCPL’s ability to drive volumes while expanding margins underpins its constructive stance, with India’s momentum offsetting near-term international headwinds.

Motilal Oswal Financial Services | Buy | Target: ₹1,450

Motilal Oswal maintained its constructive stance on GCPL despite trimming earnings per share (EPS_ estimates by 2–3 per cent over FY26–FY28E. The brokerage highlighted management's commitment to improving Indian business volumes and optimising efficiencies, while noting that the GAUM (Greater Asia, Unilever Middle East) business is expected to deliver strong profitability growth. 

 

Motilal also flagged Indonesia's anticipated recovery from FY27 as market conditions normalise, alongside total addressable market (TAM) expansion into faster-growing categories like men's face wash and toilet cleaners. However, the brokerage acknowledged near-term headwinds from macroeconomic challenges and pricing pressures in Indonesia and LATAM, which justified the modest estimate cuts. Despite these temporary pressures, analysts remains constructive, citing management's confidence in sustained profitability momentum into FY27 and the company's growth-centric strategic focus as key reasons to maintain its positive outlook.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.